2016 is quickly coming to an end and 2017 is right around the corner. Every year most Americans make a New Year’s resolution. Did you know that only 8% of people who make a resolution, achieve it? Here are 5 Financial resolutions for you to try this year. If only one of these are achievable, take one step at a time. Any little bit of saving will help your future. Beat the statistic and increase your financial stability.
- Pay off Consumer Debt
- Some credit cards can have double digit interest rates. By paying off your credit card debt, you can free up future cash flow. If you are prone to credit card debt, try to consolidate to only one card and use it for short-term items. You can also designate it for only one type of purchase like groceries or gas only.
- Build an Emergency Reserve
- The best place for your emergency reserve is in your 401k or other tax-sheltered accounts. Interest can be earned in these types of accounts and it is tax deferred. Those that are self-employed or retired should build their emergency reserve at a greater level. By building an emergency reserve, you are increasing your family’s stability.
- Purchase Long-Term Disability Insurance
- By having a job and working every day, that is your most significant financial resource. A serious injury or illness stops income. This leads to medical bills, and prevents you from saving for the future. Most employees have dental insurance over long-term disability insurance. A disabling illness or injury can be devastating to you and your family. Do you and your family a favor, and purchase long-term disability insurance.
- Increase Retirement Savings
- Most employers allow you to enroll in a retirement plan where your contributions are automatically deducted from your paycheck. With this, you never see the money that is getting taken out. By never seeing it, you can’t spend it. One tip is to increase your contribution rate by 1% each year. If you increase the contribution rate a little bit each year, your retirement fund will grow quicker. This will ensure your financial stability for when you are ready to retire.
- Create an Estate Plan
- Approximately 55% of Americans do not have a will or an estate plan in place. Not a lot of people want to think about themselves passing away. The main purpose of an estate plan is to give guidance while you are still living. This will take care of the questions that may come up like who will make your medical decision on your behalf. Putting an estate plan in place is beneficial for everyone involved.
These are some small steps to take to increase your financial stability in 2017.
Happy New Year from the The Brunner Burkhart Group!